Company Reports - Linamar Corporation
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The Sum of All Its Parts
Written by Barbara Taormina & Produced by Cory Challoner
Linda Hasenfratz is a big believer in getting into business on the ground floor.
Last month Hasenfratz, CEO of Linamar Corporation, Canada’s second largest auto and industry parts manufacturer with sales of $1.7 billion, hosted an open house for a group of high school girls considering a career in the skilled trades.
Hasenfratz took over the reins at Linamar in 2002 when her father, Frank, who launched the company back in 1966, decided to step down. But Hasenfratz didn’t jump straight from business school into the head office. She started out as a machine operator on the plant floor almost 20 years ago, and she says the experience was invaluable.
“Statistics show most successful entrepreneurs are people who have a really good understanding of the products that they’re manufacturing,” Haszenfratz told The Guelph Mercury newspaper. “It’s a great recipe for success.
It’s certainly been a great recipe for the Hasenfratz family. Frank Hasenfratz escaped his native Hungary during the Soviet invasion of 1956 and immigrated to Canada where he started his company as a one-man machine shop in the basement of his home. He named the business after his two daughters, Linda and Nancy, and his wife, Margaret, and had dreams of someday running a shop with as many as 10 workers. Today, Linamar employs more than 10,000 people in 53 plants and offices around the world.
PUMPING UP PRODUCTION
Linamar manufactures every metal piece in a lightweight or heavy-duty engine from cylinder blocks to fly wheels and pistons. The company also designs and builds transmissions and transmission parts, as well as the gears, axles, pinions and pumps for the driveline. Although the auto industry accounts for the lion’s share of the company’s business, Linamar also makes parts for other industries including the Canadian and American defense industries, and has a consumer products division that makes lawnmowers and trailers. Ford Motor Company and Caterpillar are among Linamar’s top customers.
Hasenfratz’s skill as a toolmaker and his reputation for quality work fueled the company’s early growth from a one-man shop to a multi-million dollar parts manufacturing business. During the 1980s, a series of acquisitions pushed the company toward the billion-dollar level and opened doors to new opportunities.
Linamar bought companies that were experts in building parts for machinery used in other industries such as farming. Linamar then incorporated those businesses into their own manufacturing operations and quickly took over the role as the experts in those areas.
And unlike other companies that went on buying sprees only to gut their purchases and sell them for the best offer, Linamar kept the companies it bought and operated them as self-contained subsidiaries.
Around the same time, Linamar also began retooling some its management practices. The company followed the lead of Toyota and embraced Kaizen, the Japanese practice of incrementally improving a manufacturing system through suggestions from employees at all levels of the organization. Changes such as reorganizing workers into teams, and restructuring the flow of production and reducing inventories by 40 percent and have made Linamar a leaner, faster company better able to respond to the needs of its customers, particularly the Detroit auto industry.
RESEARCH & DEVELOPMENT
During the 1990s, Linamar turned to science and technology as an avenue to continue the company’s expansion. Linamar has three performance technologies centres in Livonia, MI, Guelph, and in Crimmitschau, Germany, all devoted to product conception and development, prototyping, testing, value-added solutions, evaluation of new technologies and warranty analysis.
One of the more recent projects at the Michigan and Guelph centres involved engineers and technicians exploring ways to provide added value to parts with ramped up NVH (Noise, Vibration, Harshness) analysis and design.
Linamar continually highlights its ability to combine its design expertise with its knowledge of manufacturing. Company leaders say that double-edged approach of developing new ideas hand-in-hand with new production methods gives them an advantage. And the Linamar’s corporate culture does have nut-and-bolt flair. When the company bought Skyjack, which makes aerial scissor lifts for all types of industries, Linda Hasenfratz celebrated by making her way down to the plant floor to build one of the machines.
Linamar’s more recent growth is a result of its expanding global network . The company’s two manufacturing centres in Hungary and Germany are the heart of Powertrain Europe, which manufactures parts and systems for cars and trucks, and for machinery used in other industries such as farming. And while this division of the company has developed a specialized expertise in camshafts and common rail systems, Linamar sees its next round of opportunities in Eastern Europe’s growing automotive industry.
In 2005, Linamar opened manufacturing plants in China, Japan and South Korea and created Powertrain Asia Group. Unlike Linamar’s other divisions which are generally organized around product production, Powertrain Asia Group is regional and represents the company’s entire portfolio of products and services
In addition to building new plants and opening new offices Linamar has strengthened itself from within by continually offering its workers training programs and leadership opportunities. Linamar also fosters an entrepreneurial environment that encourages new ideas and offers employees the opportunity to develop their ideas into actual products.
And at Linamar, there is genuine respect for skilled trades workers and all they have contributed to industry. But more importantly, there’s a lot of confidence and optimism about what they’ll achieve in the future.
That was part of the message Linda Hasenfratz had for high school girls who visit the company this month. She told them that skilled workers are in demand, the pay is good and the door is open. “We’re trying to encourage women into careers in skilled trades,” she said. “It’s a great career opportunity for anybody.”